Loan Recidivists Shut Down Again in L.A.

LOS ANGELES — A federal judge granted default judgment against two married recidivists in Los Angeles who ran half a dozen phony debt relief businesses, and ordered them to disgorge $2.3 million and other frozen assets. The Federal Trade Commission settled with Tobias and Komal West and their companies in May. The July 12 order from U.S. District Judge Otis Wright also bars the Wests and their companies from “representing the benefits or performance of a product or service unless it is not misleading and based on evidence,” and prohibits them from “profiting from consumers’ personal information and failing to dispose of it properly.” The Wests and their companies, including Good EBusiness, Student Loan Help Direct, Select Student Loan, Select Student Loan Help, and Select Document Preparation charged up to $5,000 a pop for bogus student and home loan relief services, the FTC said in its sealed complaint in February. It said the Komals violated federal laws by “preying on financially struggling consumers and promising to make their mortgage or student loan payments substantially lower by renegotiating with their lender — but without ever having any intention of actually doing so.” the FTC claimed. If they did bother to do anything, the Wests and their companies often posed as their clients and entered into forbearance deals with lenders, without telling the clients they did so, or that they would be on the hook for interest payments that for many clients totaled thousands of dollars, according to the FTC. Judge Wright noted that the Wests never disclosed that student loan servicers might reject the agreements, and that they were not notarized. Before the Wests got into student loan fraud in June 2014, they defrauded mortgage holders with a similar scam, the FTC said. In that instance, they falsely advertised online that their Los Angeles business, defendant AAP Firm & Associates, was staffed by attorneys and worked with lenders to reduce clients’ mortgage payments and interest rates. The AAP Firm charged homeowners $1,000 to $5,000 upfront and promised full refunds if it couldn’t obtain mortgage relief, the FTC said. But once the clients paid for the service, the AAP Firm disappeared. AAP Firm is also a defendant in the recent case. The $2.3 million judgment represents the net sales revenue of the Wests’ illegal operations. Wright wrote that the FTC’s forensic accountants analyzed bank records provided by the Wests’ financial institutions to calculate it, and “defendants made no showing that this amount is unreasonable.” The Wests appear to never have offered much of a defense. FTC attorney Eleanor Durham said the Wests did not retain an attorney for their settlement with the FTC. After the settlement, a judgment was delivered in May against the California couple and, because they had no attorney, the corporate defendants defaulted, resulting in the July 12 ruling. Durham said the Wests have complied with the terms of the settlement and the case is closed. The Wests could not be reached for comment.